Posted: 06 March 2010 at 9:15pm | IP Logged

I have a friend prepared to take over the lease (subject to mortgage) and to continue with the same terms.  Do I need the management companies permission or do I just somehow formally notify them (via Notaire?).

BTW the lease has just ticked over the initial 9 years. Neither the management company nor myself have made any representations as to the next step. Is this significant? Will this cause any complications? 

Posted: 09 March 2010 at 10:15am | IP Logged

Strider,

I think you should have given the management company 6 months notice and kept your options open,either to sell as a classic(subject to any penalties)or to renegotiate a higher rent!

You may well have missed the deadline for either of these options!

                                           john

Posted: 09 March 2010 at 1:20pm | IP Logged

Yes, as the other poster indicates, if neither party does anything then the lease is renewed automatically for the same lease period as the previous one. Not sure about your friend taking over the lease. I suspect it is not as straightforward as the lease being changed. I think it would not be possible without the deed being changed. Contact the notaire who handled the original sale and ask.

Seamus

Posted: 09 March 2010 at 2:51pm | IP Logged

Seamus

In your opinion what is the best approach to take as you near the end of the lease? Is it expensive to negotiate a new lease i.e. in terms of notaires expenses etc? Can you negotiate more favourable terms i.e. a week in the high season? Does the rent follow the INSEE index or is that up for discussion at the end of the 9 years. All of this seems to be a grey area.

Posted: 09 March 2010 at 6:01pm | IP Logged

Hi again, thanks for yor replies.

It seems a bit drastic to be automatically committed toanother 9 years. There is nothing in the contract that states this. Is this another example of default commercial law that does not need to be specified? There may be a way out however as the lease talks about a 10 year duree from the October after  signing (which goes up to October 2010).  I will post the clause (in French) for another opinion.

I don't want the hassle of a tradional rental but I can't see the Management Company giving much away. I will contact the management company to try and see what my options are re. selling with or without the lease.

Has anyone ever sold a leaseback with or without the original lease?

Has anyone got to the end of a leaseback yet?

Posted: 09 March 2010 at 9:44pm | IP Logged

So, if I've dropped into the next 9 years by default (see above) the only way I can get back what I paid for the property is to get out of the lease by paying compensation to the management company.

Leasebacks are sold with  capital appreciation being a big plus factor, but even this is doubtful. 

If I sit tight, within the lease, and economic conditions improve, the yield will  still limit the price I can achieve.

What would you consider a reasonable yield at present (no owner weeks)?.